It seems as if the bears took over this week, as the S&P 500 was on track Friday morning to turn in its worst weekly performance since April. One of the main drivers behind this week's pullback was debt woes overseas, with the announcement by Portugal's largest publicly traded bank, Banco Espirito Santo, that it had missed some of its debt payments. Fed minutes for June were also released this week, with the announcement that the Federal Reserve will be ending its bond buying program, or QE, this October. The Fed made sure to note that the end of QE will not have any impact on its decision to keep interest rates at record lows for the foreseeable future. The second quarter earnings season also started up this week, with Alcoa (AA) leading the charge, and posting positive results. Next week will see most major banks report earnings, and investors and analysts alike are expecting lackluster results. In job news, initial jobless claims came in at 304,000, which was below expectations of 315,000. Yields on 10-year Treasury bonds were also down this week, having started on Monday at 2.63, and closed out Thursday at 2.55. Below, we look at all of Moody's municipal bond upgrades and downgrades from the past week.

Upgrades

• Capital Projects Finance Authority, FL: Moody's upgraded to Caa2 the underlying rating on CaPFA Capital Corp. 2000F's Student Housing Revenue Bonds, Senior Series 2000F-1. The upgrade is based on the improved performance of the project which has successfully paid debt service on the senior bonds but does not demonstrate sufficient surplus revenues to pay down $55.8 million of additional debt obligations or replenish a depleted debt service reserve fund.
• East Baton Rouge Mortgage Finance Agency's Single Family Mortgage Revenue Refunding Bonds, LA: Moody's upgraded from Baa1 to A2, East Baton Rouge Mortgage Finance Agency's Single Family Mortgage Revenue Refunding Bonds (GNMA & FNMA Mortgage-Backed Security Program), Series 2009 A-1, A-2, A-3 bonds due to the upgrade of Bayerische Landesbank (BLB) which provides a guaranteed investment contract (GIC) for the program. The rating is based on the investment of certain funds in a GIC with Bayerische Landesbank (BLB) which is currently rated A3 with a negative outlook. The A2 reflects bondholder exposure to BLB performance for a portion of funds needed to pay debt service.
• City of Bainbridge Island, WA: Moody's upgraded this city to Aa2 from Aa3. The rating upgrade reflects the stabilizing tax base, and consistent four-year operating surpluses, restoring the General Fund balance to healthy levels. The rating further reflects the city's modest debt and pension burdens, affluent demographic profile and strong management practices.
• Columbia County, WI: Moody's upgraded this county to Aa1 from Aa2. The upgrade to Aa1 reflects the county's improving socioeconomics and continued positive operating results, leading to the build-up substantial operating reserves and alternate liquidity. The Aa1 rating also reflects the county's moderately-sized tax base, located 25 miles north of Madison (Aaa stable) and experiencing declines in valuation; and an average debt profile with very low unfunded pension obligations.
• Darlington County School District, SC: Moody's upgraded this school district's underlying rating to Aa3. The upgrade to Aa3 reflects solid reserve levels, despite near-term declines, bolstered by strong fiscal management and oversight. The rating further reflects the sizable, albeit rural, tax base with significant taxpayer concentration, below-average wealth levels, and an average debt burden.
• Gainesville, GA: Moody's upgraded this city to Aa2 from A1. The upgrade to Aa2 reflects the solid debt service coverage, healthy reserves, low operating ratio, and strong management. The rating also incorporates the sizeable system's sufficient capacity, revenue concentration, below average socioeconomic profile, and relatively weak legal provisions.

Downgrades

• Grosse Pointe Public Schools, MI: Moody's downgraded this school district to Aa3 from Aa2. The Aa3 rating reflects recent operating deficits that have resulted in a very narrow financial position. The rating also incorporates the district's large tax base with substantial recent declines, above average socioeconomic indices, manageable debt burden and long term risks posed by exposure to an underfunded cost-sharing retirement plan.
• Electra Independent School District, TX: Moody's downgraded to A3 from A2 the rating on the district's $1.5 million outstanding parity debt. Proceeds from issuance of the Bonds will be used to remodel an existing elementary school and build a new junior high school.
• Louisiana Public Facilities Authority: Moody's downgraded to A2 from Aa3 the long-term letter of credit backed rating of the Louisiana Public Facilities Authority Revenue Bonds (Dynamic Fuels,LLC Project) Series 2008 (the Bonds) in conjunction with the substitution of the existing letter of credit (LOC) provided by JPMorgan Chase Bank, N.A. with a substitute LOC provided by Bank of America, N.A.(the Bank) effective July 8, 2014.
• Coachella Valley Unified School District, CA: Moody's downgraded this school district to A2 from A1. The downgrade captures the rapid narrowing of the district's financial position within the last two fiscal years and our expectation that this trend will continue, at least for the near-term.